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Greek deflation slows in February, prices drop for 24th month

Tuesday, March 10, 2015 - 18:21

Greek consumer prices fell 2.2 per cent year-on-year in February, with the annual pace of deflation slowing from a 2.8 per cent decline in January, data from the country's statistics service showed on Tuesday.

PHOTO: AFP

[ATHENS] Greek consumer prices fell 2.2 per cent year-on-year in February, with the annual pace of deflation slowing from a 2.8 per cent decline in January, data from the country's statistics service showed on Tuesday.

Greece's EU-harmonised deflation rate also decelerated, showing prices fell by 1.9 per cent in February, with the reading slower than an average forecast of a 2.6 per cent drop in prices by economists polled by Reuters.

Greece's consumer prices fell by an average 1.3 per cent in 2014 compared to a year earlier.

For years an inflation outlier in the eurozone, Greece has been in deflation mode for the last 24 months as cuts in wages and pensions and a deep recession exerted downward pressures.

Deflation in Greece hit its highest level in November 2013, with consumer prices registering a 2.9 per cent year-on-year decline.

Eurozone inflation turned negative in December for the first time since 2009 following a steep drop in global oil prices and fell further in January with ECB President Mario Draghi warning it was likely to be low or negative for months.

On an annual basis, prices in the 19 countries using the single currency were 0.3 per cent lower in February than a year earlier.

The European Central Bank has convinced slightly more than half of 83 economists polled by Reuters that its money printing programme, which starts in March, will be successful in bringing eurozone inflation back up to target.